Tuesday, 25 December 2018

Investing Websites (And why I use them): Tools of the Modern Day Investing Process

In this day and age, information has become a commodity. You can do an end-to-end research and analysis of a company by sitting in the comfort of your home. So in a way, several websites have become a necessary addition to an investor’s toolkit. Here are a few investing websites I use (Most of them are free).

Monday, 10 December 2018

GlaxoSmithKline Consumer Healthcare Valuation: Buyers' Remorse or Sellers' Dilemma?

Taller. Stronger. Sharper. These three words are synonymous with the childhood of several Indians. Indeed, it's the tagline of 'Horlicks', the health drink produced by GlaxoSmithKline (GSK) Consumer Healthcare. The company has several other impressive brands under their portfolio such as Boost, Viva, Maltova, Crocin, Sensodyne, Eno and Iodex. But that's not the talk of the town. The talk of the town is the proposed, massive Rs. 31,000 Crore merger of Hindustan Unilever Limited, India's largest FMCG player and GSK Consumer Healthcare. Who will benefit from this deal, Goliath or David?

Monday, 26 November 2018

Motherson Sumi Systems Valuation: Saving the Hippopotamus

If you've ever owned a car, you are sure to have used this company's products. With that bold opening statement, let's attempt to unravel the story and the numbers behind one of the largest Retail Automotive players in the country: Motherson Sumi Systems Limited (MSSL).

Monday, 12 November 2018

Kajaria Ceramics Valuation: Regaining Lost Ground?

I was recently touring the beautiful hill station of Munnar in Kerala. To my surprise, the way to Munnar and back was covered with several hoardings of Kajaria Ceramics, the market leader in the Tiles segment. I had been following it earlier on and off, and with the recent slide in its share price, I thought I should whip out my Valuation model to see if the correction was justified.

Sunday, 4 November 2018

CCL Products (India) Valuation: Freshly Brewed Value

Everyone loves coffee and not just in India. Coffee is loved globally and even today, it is one of the most sought-average hot beverage by a long margin. So, it's not far-fetched to say that CCL Products (India) is in a sweet spot, operating in such a niche industry.

Sunday, 7 October 2018

DHFL Valuation: When the Facts Change..

Disclaimer: After the Cobrapost expose, there has been a lot of noise around whether the numbers reported by DHFL are genuine or not. While a rebuttal from the Management is expected, as a responsible student of valuation, I ask that you take this post with a mountain of salt. There's a famous quote in relation to Statistical Analysis that goes "Garbage in, garbage out". Put another way, if it actually turns out that the numbers were indeed misleading, then this post would be too. In that regard, I ask that you exercise due caution.

Sunday, 23 September 2018

Goodyear India Valuation - A 'Practical Thought' Model for Valuing Equities

In his book "Poor Charlie's Almanac", Berkshire Hathaway's Vice Chairman Mr. Charlie Munger talks about an informal speech he gave in 1996, titled "Practical Thought About Practical Thought?". He warns that not many people understood his talk and it was practically a communication failure. But at the crux of this speech lies hidden a valuation technique that acts a saving grace for those averse to intrinsic valuation methods such as the DCF or the DDM.

Wednesday, 19 September 2018

Five Below Valuation: Scaling, $5 At A Time

Recently, I was thinking about valuing a company traded outside India and it came to me as a very interesting proposition when someone suggested that I value Five Below. FIVE (NASDAQ) is a chain of discount stores in the US that sells all its products for $5 or below. And does it well.

Sunday, 9 September 2018

Harita Seating Systems Valuation: Buying Things Well

Have you ever traveled in Bharat Benz, Volvo or Scania bus? Or for folks who are living / have lived in Karnataka, traveled in a BMTC bus? Chances are, you might have unwittingly used the product(s) of Harita Seating Systems -- a not-so-well-known seat manufacturer.

Thursday, 9 August 2018

D-Mart Valuation: The 100 P/E Conundrum

Avenue Supermarts Limited, or D-Mart as it is better recognized, is a curious case. The stock trades on the Indian markets at a staggering P/E of 118. Although absolute P/E levels are nowhere near indicative of undervaluation or overvaluation of a stock, we still have to ask, how much is too much? Today, we will attempt to answer that question.

Wednesday, 25 July 2018

HDFC AMC IPO Valuation: Speed Demon

'Mutual Funds Sahi Hai' says a famous Indian TV advertisement. While the slogan is used and abused several times over, the sentiment seems to ring true with many Indians. We know for a fact that only 2-3% of India invests in Equities directly or in Mutual Funds. However, the general trend is that the number of people investing in these modern savings schemes have increased drastically. So, it would be an understatement to say that HDFC AMC filed for an IPO at the most opportune of times. With HDFC AMC's IPO opening today (25-07-2018), I wanted to register my thoughts on the company and its Valuation before I could be accused of hindsight bias from the Listing Price.

Sunday, 22 July 2018

Equity SIP Returns Simulator: An Indian Context

I was recently asked the question 'If I invest 6k SIP in mutual funds how much can I accumulate in 10 years?' on Quora, a Q&A site. I usually ignore questions like these, because there are a gazillion tools available online that calculate SIP values based on a required rate. Then I realized, there are no tools available, in the Indian context, that calculate SIP values based on historical averages and standard deviations. I'm a big fan of probabilities, reversions to mean and Excel models. So I pushed myself to build one!

Sunday, 8 July 2018

Shemaroo Entertainment Valuation: The Netflix of Bollywood?

Gone are the days when Indian families rented out VCDs/DVDs on a quite Sunday afternoon and sat down to watch a movie with samosas and hot chai. Every day, more and more set of eyes are turning towards the internet. That online content making and distribution is an emerging macro trend in India is undeniable. Shemaroo Entertainment is a niche player in such a niche industry. Does the market under-appreciate its merits or does it overshoot its possibilities? Let's explore these questions further.

Sunday, 24 June 2018

S&P BSE SENSEX Valuation: All is Fair in Love and Markets

The SENSEX has crossed the 35000 mark and investors are getting a little uneasy. They have voices inside their heads asking "Is the SENSEX running ahead of itself? Should I cash out or should I stay in?" While those are difficult questions to give a definitive answer to, I thought I'd try to come up with a ballpark answer based on market metrics.

Tuesday, 5 June 2018

Masterclass: Warren Buffett's 6 Commandments for Stock Picking

We are in the midst of a Midcap and Smallcap carnage in Indian Equities. While the gamblers are losing their minds, the smart investors are readying their war chest for loading up on undervalued bets. At this juncture, I would like to turn back in history and look at how Mr. Warren Buffett goes about picking stocks.

Sunday, 27 May 2018

Apple Juice Investing: Do You Know Your Cost of Capital?

The Discounting Rate or a 'Cost of Capital' is often a very important input in any kind of Valuation model, including Equity Valuation models. But do you know the Cost of your Capital?

Sunday, 13 May 2018

Eicher Motors Valuation: Valuing the Indian Dream

We all know the feeling.. the thrill of kick-starting a Royal Enfield motorbike and hearing the *dug dug dug* sound emerge from the rear. Over the years, Royal Enfield has almost become a household name. It's become a dream every Indian aspires towards and every family is proud to have. But what is the Value of that dream?

Sunday, 8 April 2018

Buying High P/E Stocks: Was Benjamin Graham Wrong?

The 'Price-to-Earnings' Ratio is perhaps the most commonly used Valuation tool in Stock Markets around the world. The concept was popularized by Benjamin Graham of 'The Intelligent Investor' fame. The general notion was that 'Low P/E' stocks produced better returns in the long run. But is that really the case?

Monday, 2 April 2018

Numbers and Narratives: A Simple Discounted Cash Flow (DCF) Model for Equity Valuation

I still remember the day I got into Equity Valuation. It was a drowsy Saturday afternoon and I was browsing through YouTube videos on Finance. I had been feeling quite annoyed with myself, because I was not making use of my free-time productively. You can imagine how difficult that must have been.

Saturday, 6 January 2018

Masterly Inactivity: The Case for Very Long Term Passive Investments

The term 'Masterly Inactivity' was coined by Charlotte Mason in her famous book Original Homeschooling, a masterpiece on child development, parenting and education. The idea is that, parents should develop a child by 'some letting alone and some wise openings'. It's a restatement of the age-old wisdom that one should not worry about the things they can't control. I believe the idea of 'masterly inactivity' applies to investing as well.